The Insightful Startup E-Book

David Today

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 118

Veröffentlichungsjahr: 2023

Beschreibung

Why is Original Insight the single most important ingredient for startup success and how can startup founders obtain it? The Insightful Startup takes you on a personal journey, from the author's own venture-backed startup, emerging among the first generation of tech startups from Denmark in the mid-2000s, to his decade-long career as a venture capital investor investing in tech startups at the earliest stages. David Today shares how his understanding of startup success evolved over three paradigms spanning fifteen years. The book provides you with real-life examples from Nordic startups the author founded, invested in, and mentored. Readers familiar with the Nordic ecosystem will find this a refreshing vantage point, as it hereby distinguishes itself from the classic US-centric Silicon Valley entrepreneurship literature. Regardless if you are a startup-founder, a startup investor, a startup mentor, or a startup ecosystem organizer, you will find the book Insightful.

Leseprobe

Contents

Foreword

Why the book and how to read it

Prologue: The Mean Startup

CHAPTER 1: The startupfication of everything

CHAPTER 2: Real life problems of the lean startup approach

CHAPTER 3: The fallacy of market gaps

CHAPTER 4: Startups are built on Original Insight

CHAPTER 5: Developing Original Insight

CHAPTER 6: Extracting Original Insight

CHAPTER 7: Scaling Original Insight

Epilogue

Acknowledgments

About the Authors

Foreword

When watching top athletes—Olympic gold medalists and World Champions—it's always amazing to see the level of skills they possess and what they can achieve, regardless of the sports they participate in. For many years, there has been a debate about what makes a top athlete. Is it talent, something ingrained in their DNA, or is it simply the result of countless hours of practice? The truth likely lies somewhere in between.

Similarly, the discussion about startups has persisted for many years. Are entrepreneurs born with specific traits, or are they made through experience? Do successful startups emerge from individuals with unique skills, a distinctive psychology, or a particular kind of DNA, or do they succeed through continuous experimentation? Once again, the truth probably lies in between.

This book focuses on successful startups and introduces a term that has been absent in my entire professional life working with startups: Original Insight. Insightfulness might be one of the missing elements in understanding startup success—a sort of DNA that all of us involved in startups are searching for. It could be the X-factor that distinguishes outliers from the rest of the startups. Just like in top athletics, a single trait doesn't guarantee success; it requires various skills and significant effort. However, as we know, the likelihood of success is closely tied to talent and, in some cases, innate traits. Founders may not be born with specific insight, but a startup can be.

Unlike the inherent traits crucial for success in some sports, insightfulness can be cultivated over time. In this book, David Today contributes to the understanding of how founders can develop this specific DNA and how it forms the basis for successful startups.

As you read the book, you might find yourself confusing insightfulness with customer discovery—the process of understanding your customers better than they know themselves. They share some elements, but they are distinct. Some startups spend months or even years on customer discovery without becoming insightful, while founders fresh out of university may possess unique insights. Comprehending insightfulness provides at least one crucial piece of the puzzle that constitutes great startups.

My first encounter with David Today was when I invested in his first startup. Later, we joined forces to support and invest in startups. David lives and breathes startups; I'm confident that startups and the essence of success occupy his thoughts from morning until night. Combine this passion with several years of working with startups, and you get something truly insightful.

Peter Torstensen

CEO at Accelerace

Why the book and how to read it

This book is exactly what the title suggests: it's a book about startups and insightfulness. More specifically, it delves into how successful startups build their ventures upon insights so profound this type of insight deserves its own name: Original Insight.

Yet, if Original Insight is indeed so vital to startup success, why hasn't it been fully explored before? I believe it is often hinted at. It emerges in nearly every interview with successful founders and in the anecdotes shared by renowned investors. However, I have yet to encounter someone who thoroughly expounds upon this fundamental cornerstone of startup success with the depth and comprehensiveness it genuinely deserves. The evidence lies in the fact this concept has never been formally coined. Therefore, I have taken it upon myself to embark on this task. However, before delving into Original Insight, comprehending its origins is paramount. Thus, I will guide you through a journey spanning from chapter to chapter as follows:

In the Prologue, I commence the journey with a story from my own startup and the challenges we faced in an era lacking a distinct theoretical understanding of startups. I then discuss the arrival of three successive books that bestowed startups with their own theoretical realm—the lean startup approach— and the manifold benefits it brought.

In Chapter 1, I describe the downsides and challenges of the lean startup approach, commencing with what I term "the startupfication of everything," which led to confusion about what a startup is and the intense problems founders and investors experience when confusing new businesses with startups.

In Chapter 2, I continue to delve into the challenges of the approach we encountered in our accelerator when dealing with founders heavily influenced by the lean startup approach. The objective of this chapter is to contrast these founders with the highly successful founders who surprisingly had little influence from the lean startup approach.

In Chapter 3, I share stories from our accelerator and begin discussing what defined our most successful companies. I conclude the chapter by presenting three of our most successful companies, which laid the foundation for understanding the topic of this book: Original Insight. I do this to help you relate Original Insight to "real" startups when explaining the concept in the following chapter.

In Chapter 4, I explain what Original Insight is and provide analogies and examples of the concept, with the hope you will exit the chapter with a solid grasp of Original Insight.

In Chapter 5, I offer a framework for developing Original Insight through a method we have termed Beachhead Immersion. The aim of this chapter is to assist you in implementing Beachhead Immersion as the primary tactic for developing Original Insight.

In Chapter 6, I discuss how the need to cultivate Original Insight never ceases, even as the startup grows and scales. The point I hope to emphasize is that Original Insight is not only crucial at the outset, but also foundational to scaling a startup.

In each chapter, I will share sub-stories. Often, I delve briefly into history and draw upon numerous analogies from the worlds of sports, business, and even personal experiences. Sometimes, these stories may briefly divert you from the main storyline, but they all serve a purpose, and I do my utmost to guide you back on track.

Just like any journey, the narrative evolves from chapter to chapter. Therefore, the book is intended to be read sequentially. If you skip anything beyond this point, you may miss the vital pieces that contribute to a complete understanding of the concept in this book and the power with which the concept is meant to equip you.

As mentioned, this journey begins in the Prologue, where I will drop you off in the midst of the biggest crisis of my life. Let's embark on this journey together.

Prologue: The Mean Startup

Vikings in Canada

"Your keys to the office no longer work, and your belongings are waiting in a box at reception. You're both fired." These were the shocking words delivered to us via Skype by the Chairman of the Board of my startup.

Just four days earlier, my co-founders and I had boarded an airplane from Copenhagen to Toronto, filled with anticipation and excitement, to negotiate a deal with our most significant potential customer yet. The company, a publicly traded software giant with a dominant market share in North America, was the juggernaut we had always dreamed of landing. However, our expectations were immediately shaken when the company representative introduced himself as the head of M&A. His title indicated he was in charge of acquiring businesses and not implementing our software.

The head of M&A, who we shall call Jim, proceeded to bring us to the nearest Wayne Gretzky bar where he seemingly did his utmost to get us drunk. After several hours of these proceedings, he abruptly left and texted us to meet him again the next day at the same time and place. We were perplexed, but being relatively young and inexperienced, we trusted that Jim knew what he was doing.

The following day, we met Jim at the Wayne Gretzky bar as directed. Once again, he kept a stream of drinks flowing. To further induce us to engage in this alcoholic behavior, he kept referring to us as “the Vikings.” Even though neither my cofounder nor I have any Viking heritage, nor possess remotely Viking like features. (I am Korean by heritage and my cofounder is from Bosnia).

Again the evening ended with Jim abruptly proclaiming to meet him the following day, same time and place. However, we were getting suspicious that this was not normal business practice, so we called our local representative, Alex, in Canada and asked him to join the next meeting. Alex was Canadian after all, and perhaps he could interpret if we were moving any closer to a deal. Once again, we found ourselves somewhat reluctantly indulging in our impersonated Viking-like consumption of alcohol. But Alex, much less patient than us, quickly reached his limit. Rising from his seat, he demanded to know the purpose of this charade.

The atmosphere suddenly shifted. Jim's friendly demeanor turned cold, and his joking smile transformed into an enigmatic gaze. Swiftly, he produced a set of documents titled "Intent of Acquisition." Jim instructed us to meet him the next morning at 9:00 a.m. in their office, where he assured us that the Chairman and CEO would be present to sign the documents. With that, Jim left, walking as straight as if he had been sipping water all along.

The worst best case scenario

One might expect us to be dumbfounded by this sudden acquisition offer, but the truth is, I felt a sense of relief. Weeks prior, during a tumultuous board meeting with the representatives of the Danish VC firms that had invested in us, tensions had reached their peak. Our sales figures had failed to meet the lofty projections we had promised during our initial pitch to investors, leaving us in a precarious situation.

Our board members were obsessed with budgets and forecasts, caring little about the disruptive forces unleashed by Apple's iPhone in the mobile software and content industry in which we operated. We had built software that made it easy to create specialty websites for mobile phones, but the smartphone made our product much less relevant because a smartphone could access websites built for computers. We attempted to explain the necessity of adjusting our projections and adopting a new strategy, commonly known in the startup world as a “pivot”. However, our pleas fell on deaf ears. Their response remained consistent: "You created the projections, not us!"

The final board meeting before our trip to Canada had devolved into shouting matches and name-calling. In our mid-twenties, driven by testosterone and naivety, our inability to navigate the political dynamics within the boardroom had worked against us. Frustrated, we adopted a defiant "f**k you" attitude, playing hardball, and further alienating our board members.

When the opportunity in Canada presented itself, it was a lifeline. If the Canadian juggernaut acquired our software, it would help us recover from the slump in sales and put us back on track. Alternatively, if they acquired the entire company, we would finally be liberated from the clutches of our investors and bag a nice sum of money. Both outcomes seemed like manna from heaven. Therefore, when Jim laid down the acquisition offer, it was the best-case scenario. Or so we thought.

The next morning, we went to the office of our soon-to-be owner to sign the acquisition papers. We were unsure what to expect because this was the first time my co-founder and I had sold a company. But the whole ordeal went surprisingly fast, and we were out of there a few minutes later with signed papers in our hand. We quickly went back to the hotel and scanned the documents and sent them to our investors and requested a board meeting to discuss the matter.

And so it unfolded that we logged onto Skype, only to be met with the words: “you are fired.” Instead of being congratulated on our efforts to secure the acquisition offer, they accused us of forging the documents. It turned out that our investors had been contemplating our removal for some time. Our impromptu trip to Canada and the sudden acquisition offer were the final nail in the coffin. When we boarded the plane back to Copenhagen, none of us said anything for eight hours.

Seeking answers

Upon my return to Copenhagen, I reached out to the one investor who had not taken part in my ousting, Peter Torstensen, the founder of the first startup accelerator in Denmark modeled after Y Combinator called Accelerace. Always driving a cheap car and insisting on the worst table in the office, Peter Torstensen is not after the money or the status. Instead, he is driven by a true passion for understanding startup success that starts at the office before 5 am where he spends the solitudinous morning hours pondering about startups, and often gets mathematical about it.

Peter was attentive, and I sought empathy and an outlet for my rage. But as our discussion progressed, the focus shifted from venting my frustrations to a genuine curiosity about what had truly gone wrong.

Initially, I struggled to articulate the exact reasons behind my failure, aside from my strong conviction that our board members were simply idiots. However, as I delved deeper into the situation, nuances and insights that I had overlooked began to surface.

First and foremost, I came to the realization our board members were not necessarily idiots, but rather misplaced in their roles. Our startup was part of the first wave of tech startups in Denmark and the venture capitalists on our board had not themselves been tech founders. Instead, they hailed from successful corporate careers where they had overseen impressive product lines and substantial business units. Their unwavering focus on our ability to deliver the projected revenue was precisely what they had been trained to do.